The market is hotter than it looks, because when a decent property in a superior location gets listed for an attractive price, the buyers come running – there just aren’t that many that fall into this category.
How many sellers are willing to list for an attractive price give them away?
Here’s one:
How is the 2010 market comparing with previous starts?
North SD County Coastal Detached Homes (from Carlsbad to La Jolla), during Jan. 1-11:
| Year | Total Listed | LP $/sf | Closings | SP $/sf |
| 2002 | $366/sf | $252/sf | ||
| 2003 | $416/sf | $319/sf | ||
| 2004 | $527/sf | $385/sf | ||
| 2005 | $530/sf | $498/sf | ||
| 2006 | $560/sf | $511/sf | 2007 | $543/sf | $522/sf |
| 2008 | $465/sf | $481/sf | ||
| 2009 | $545/sf | $387/sf | ||
| 2010 | $553/sf | $339/sf |
The lower number of listings is contributing to the constricted-inventory conditions, and the average list-price-per-sf is reflecting exuberance on behalf of the early listers – we’ll see how they do.
The very-low number of closings makes it look like things fell apart towards the end of 2009, but was there a big rally to close before year-end?
North SD County Coastal Detached, DECEMBER:
| Year | Dec. Closings | SP $/sf | DOM |
| 2002 | $332/sf | ||
| 2003 | $370/sf | ||
| 2004 | $488/sf | ||
| 2005 | $469/sf | ||
| 2006 | $477/sf | 2007 | $441/sf |
| 2008 | $392/sf | ||
| 2009 | $403/sf | ||
Yep, there was a push to close at the end of 2009 – the industry is starved for transactions.
Over 2009 it looks like we just stumbled along in North SD County Coastal region, in spite of being 18% off peak pricing. Here are the yearly totals:
North SD County Coastal Detached, YEAR
| Year | Total # of Closings | SP $/sf | DOM |
| 2002 | $303/sf | ||
| 2003 | $346/sf | ||
| 2004 | $446/sf | ||
| 2005 | $479/sf | ||
| 2006 | $481/sf | 2007 | $468/sf |
| 2008 | $438/sf | ||
| 2009 | $394/sf | ||
If there were more well-priced properties, we could sell twice as many homes. Back in the day, everything was selling, even the crappy deals. Today the buyers are much more discerning, and if the price ain’t right, no sale.
Want to learn more about real estate? Look at properties every day.
Let’s view at least 200 videos this year, displaying 5+ houses each.
A year from now, you will have seen over 1,000 houses in North SD County Coastal region, and be able to evaluate any house around. You’ll feel more confident and comfortable about buying and selling, and when the right one comes along, you’ll be ready!
This article from bankrate.com has several good tips for homebuyers:
http://www.bankrate.com/finance/real-estate/when-dream-house-becomes-horror-home.aspx
To summarize the article – when buying a home, you should consider:
An excerpt:
“To avoid potential short-term value depression, potential buyers should check local foreclosure rolls for an excess of pending defaulters in a neighborhood”, says Jim Klinge, owner of Klinge Realty in San Diego. But foreclosures aren’t always a stigma. Whether foreclosure buyers are investors or owner-occupiers, “they’re coming in solvent enough to qualify for full mortgages,” he says. “They’re also fixing up houses in disrepair and are usually smart landlords.” One big “must” for every buyer, says Klinge, is to check local sex-offender lists. “It’s a bummer when you find out later that the guy across the street is a peeper.”
More auction-list and REO properties; these are in Del Mar and Leucadia, west of the I-5 freeway. But first, some short-sale advice for listing agents:
Tom Tarrant is a San Diegan who moved to San Antonio to remodel and sell historic houses while waiting out the California Real Estate Collapse. He has a great blog with videos about the details of home remodeling, selling flippers, and snippets about Texas!
I asked Tom about featuring him here, and how it all came together. He responded, “There were alot of California investors flipping and parking cash here in rentals in 2007-2008. I think Bruce Norris was writing about moving your money to Texas around that time. The local realtors had a hayday selling multiple properties to them so it was a mini bubble in its own way. Now its slowed down a bit, but all in all SA’s managed to escape most of the national housing mess. Most of the California investors are now gone or it seems cashing out to move their money back but thats o.k. with us as there is less competition on the fixer uppers.”
A link to his blog (scroll down to the beginning):
Tom Tarrant – Adventures in House Flipping
An excerpt, with links to two of his videos:
The Hat Trick House is finally done and officially on the market and in MLS. We’ve had a swarm of buyers throughout the rehab and 3 great offers before it was even finished. We went 9% over budget but luckily our estimated sales price is surprisingly up 25% due to market conditions! Our list price is $359,000, this will be the highest sale in our area and set a new high comp if it sells for that price. My wife and I staged the house and it’s all ready for an advertised open house this Saturday. We already had one showing today, one scheduled for tomorrow morning and an agent that sold another one of our properties (The Abandonded House) just called and her “picky” client found it today on Realtor.com and wants to see it. The agent from our first showing today said the master bedroom closet alone would sell the house. Really?
From the hills to the sea, trustee-sale pricing has gotten more attractive – here’s another example:
Hat tip to RR for sending this along:
A man received a lesson in the adage, “Let the buyer beware.”
Billy Joe Sanders, of Pittsburgh, says he bought a home in Canonsburg during a Washington County tax sale in August. When he went to check on the property on Christmas Eve, he learned that it had been torn down by the county’s redevelopment authority — and has since learned his $5,500 won’t be refunded.
County officials say tax sales all include a “buyer beware” clause, and owners are responsible for doing a title search and otherwise checking on the property’s status.
Officials say buyers of homes slated for demolition are usually notified, but sometimes it doesn’t happen.
Mr. Sanders says he plans to bill the county or sue to get his money back.
Read more: http://www.post-gazette.com/pg/09364/1024553-100.stm?cmpid=latest.xml#ixzz0bC6XIdIZ
Will we see the banks/servicers using the trustee sales as a primary channel for selling REOs in 2010?
It looks like WaMu/Chase has been aggressively pricing their opening bids to move properties at the court house steps. Their trustee has conducted 302 trustee sales this quarter, and only took back 109 properties, when the overall average lately has been around 50% of the trustee sales going back-to-bene.
Of the nine properties over $800,000 that they have sold to third parties at the court house steps in 4Q09, the average sales-price-to-published-bid was 62% – and their opening bids were even lower!
Since the foreclosure moratoriums expired, the trend lately has been that the number of trustee sales that resulted in going back-to-bene have stayed relatively steady, at around 1,000 per month.
It’s the 3rd-party purchases, and the cancellations that have been increasing:
This month’s numbers are incomplete – with three days to go there are still 425 trustee sales scheduled for December, 2009!
I’m hoping that the increases in 3rd-party purchases and cancellations means banks and servicers are looking to move more property, either by aggressively pricing their trustee sales (3rd-party buys) and/or completing more short sales (cancellations).
If WaMu and others are going to be using the trustee sales to unload properties, we’ll want to be there to enjoy the additional well-priced inventory!
Here’s a close-up of the process on the court house steps. In 2008, somebody filmed this actual trustee sale of 1825 Chicago St. in Bay Park. The opening bid is $435,240, but no takers, and it goes “back to bene”.
A month later the bank listed it for sale, with list price of $446,507. After being on the market for six days, it sold for $454,000 with a $13,000 credit to buyer.
We’ll provide more trustee-sale results by video in 2010 because we’re wondering; could the court house steps be a primary marketplace next year?
Are you looking for an experienced agent to help you buy or sell a home?
Contact Jim the Realtor!
CA DRE #01527365, CA DRE #00873197
